Decommissioning Insight 2018

In Summary T his report provides a fresh overview of the emerging by Oil & Gas UK since 2010. The cumulative forecast decommissioning expenditure over the next ten years on the UKCS is £15.3 billion — a significant reduction compared to recent years. Whilst some of the workload is seen to be re-phased beyond the ten-year picture, real-world decommissioning experience is also driving new efficiencies, reflected in the updated forecasts. This progress will be instrumental as the industry, supported by its regulators and government, strives to reduce decommissioning expenditure by 35 per cent over the years to come – a shared goal which supports the policy of Maximising Economic Recovery (MER). Decommissioning is also part of the natural lifecycle of an oil and gas asset. Set in context with the rest of the industry, outlay on decommissioning has risen since 2004 but is still only 8 per cent of the overall expenditure on oil and gas in the UKCS. Investment in new developments continues to outweigh decommissioning expenditure significantly and retaining existing infrastructure will help drive further recovery. Nevertheless, decommissioning is here to stay, and with steady workload and expenditure forecast over the next decade presents an enduring opportunity for the UK supply chain. 2,379 wells are expected to be decommissioned in the North Sea over the next ten years 5,724 km of pipelines are slated for decommissioning by 2027 in UKCS Subsea infrastructure removal accounts for 11.3 per cent of forecast expenditure Unit well costs continue to fall across all areas of the North Sea of decommissioning expenditure across the top 12 markets will be spent in the UKCS The UK is the largest global market for decommissi ning spend over the next decade 8% 48% of UK expenditure is in the central North Sea billion is forecast to be sp nt n deco missioning in the UKCS by 2027 An average billion will be spent per year on the UKCS up to 2027 2,379 wells 5,724 km of pipelines are slated for decommissioning by 2027 in UKCS of decommissioning expenditure across the top 12 markets will b spent in the UKCS The UK is the largest global market for decommis ioning spend over the next decade and rapidly maturing decommissioning market on the UK Continental Shelf (UKCS) and is the latest in a series published

billion is forecast to be spent on decommissioning in the UKCS by 2027

8% 35%

e

Decommissioning accounted for around 8 per cent of overall UKCS oil & gas industry expenditure in 2018 OGA target reduction in decommissioning expenditure by 2035 against a 2016 baseline billion is forecast to be spent on decommissioning in the UKCS by 2027

mmissioning diture across p 12 markets

l be spent the UKCS

m of pipelines slated for missioning

Decommissioning will open new markets for the UK supply chain, a key component of Well decommissioning is the source of greatest cost, with 8% Decommissioning accounted for around 8 per cent of overall UKCS oil & gas industry expenditure in 2018 49% of forecast expenditure up to 2027

e

y 2027 n UKCS

acti

Decommissioning accounted for around 8 per cent of overall UKCS oil & gas industry expenditure in 2018 ar expected to be decommissioned i the North Sea over the next ten year

unit

cost

Decommissioning on Unit well costs continue to fall across 203

During 2017, the number Decommissioning will open new markets Subsea infrastructure removal accounts for

Meeting, then beating, Decommissioning is a growing market in Decommissioning will open new markets

8 well costs e to fall across

Made with FlippingBook - professional solution for displaying marketing and sales documents online